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Bengaluru Civic Body to Auction Properties of Tax Defaulters with Over Rs 365 Crore in Dues Starting December 2

The Bruhat Bengaluru Mahanagara Palike (BBMP) has announced that it will begin auctioning properties of tax defaulters starting December 2, 2024. This move follows several months of non-payment, despite the introduction of the One-Time Settlement (OTS) scheme nine months ago, which provided tax defaulters with a chance to clear their dues at a reduced cost by waiving penalties and interest. However, many property owners did not take advantage of the scheme, prompting BBMP to take stricter action.

As of November 23, 2024, BBMP’s data revealed that approximately 2.3 lakh property owners owe over Rs 365 crore in property taxes. The total arrears across nearly 4 lakh properties in Bengaluru amount to Rs 734 crore, with a significant portion stemming from non-residential properties. The auction will focus on these properties, and BBMP officials have confirmed that the process of issuing notices to defaulters will begin on December 2, 2024. The properties will be auctioned publicly, excluding those protected by court orders. The OTS scheme, aimed at encouraging defaulters to settle their tax liabilities, offered reductions on penalties and interest charges. Despite this incentive, more than two lakh property owners failed to make use of it. With the scheme’s deadline fast approaching, BBMP does not anticipate a large influx of payments on the final day. As a result, the BBMP is moving forward with the auction plan as a stronger measure to recover the Rs 734 crore in outstanding taxes.

BBMP’s decision to auction the properties highlights its determination to address the growing tax arrears, particularly from nearly 20,000 non-residential property owners responsible for approximately Rs 150 crore in dues. Additionally, BBMP has successfully collected over Rs 221 crore from properties that were previously unassessed or outside the tax net, expanding the city’s tax base. The BBMP also estimates that around 5 lakh properties in Bengaluru are not registered with a khata, meaning they are not paying property taxes. Property owners in this category can now apply for a provisional tax number online, which will allow them to pay their outstanding taxes. This auction of tax-defaulter properties is part of the BBMP’s broader effort to ensure efficient property tax collection in Bengaluru, which is crucial for funding the city’s infrastructure and civic services. The threat of property auctions is expected to motivate many defaulters to clear their dues, contributing to the BBMP’s revenue and the city’s development.

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